Are there cost orders in family law? In Australian law, the concept of “costs orders” refers to the legal expenses incurred by parties in a court case. These costs can include legal fees, court filing fees, and other expenses associated with litigation.
In many commercial law cases, the court will make a costs order at the conclusion of a case, determining which party is responsible for paying these expenses. The general rule is that the losing party must pay the costs of the winning party.
However, the court has discretion in making these orders, and various factors can influence the decision, such as the conduct of the parties during the case and the complexity of the matter.
Generally, the specific rules and procedures for costs orders vary depending on the type of case and the jurisdiction within Australia.
Typically, in commercial law proceedings, the unsuccessful party will need to pay the legal costs for the successful party, in addition to any compensation.
Different legislations, and court rules and regulations set out provisions in relation to cost orders. The court may order one party to pay all or some of the legal costs of the other party. Legal costs may include costs for:
- barristers,
- court filing fees,
- fees for expert witnesses etc.
Types of Costs Orders
Standard Costs Order: This is the most common type of cost order. It means that the losing party in a case must pay the legal costs of the winning party. Courts usually determine the costs based on a scale of fees, which can vary depending on the court and the type of case.
Indemnity Costs Order: In some cases, the court may order the losing party to pay the winning party’s costs on an indemnity basis. This means that the losing party must pay all of the winning party’s legal costs, which can be higher than what the court would award under a standard costs order. Courts typically award indemnity costs when they deem a party’s conduct during the litigation to be unreasonable or improper.
Court’s Discretion in Making Cost Orders in Family Law Proceedings
Unlike commercial law proceedings, cost orders do not follow the event in family law proceedings.
Section 117 (1) of the Family Law Act (1975) states that each party to a family law proceeding shall bear his or her own costs. Note however that the court can exercise discretion in deciding whether to order one party to pay the costs of the other in certain circumstances.
According to Section 117 (2) of the Act, the court can make an order for costs in family law proceedings based on certain factors. Given below is a list of some of these factors:
- The conduct of parties to the proceeding.
- The financial circumstances of the parties involved.
- If any of the parties receive Legal Aid assistance.
- In case of Legal Aid assistance, the terms and conditions of the assistance.
- Whether one party has been completely unsuccessful in the family court proceedings.
- If any party has proposed an offer to settle, and the terms of the offer.
- Whether parties followed previous court orders.
- All other relevant matters.
Can Cost Orders Stifle Litigation in Family Law?
The absence of strong cost orders in family law intends to make family courts more accessible for all. It allows parties to reach out to the courts and legal system without needing to worry about the costs of the other party, in case of unsuccessful outcomes.
While this is undoubtedly a great advantage for parties who wish to seek the support of family courts, it does not prevent litigation in family law. Therefore, the question of stronger cost orders in family law becomes important as it can effectively serve to stifle litigation – especially where litigation is not required in family law.
Cost orders can act as a deterrent for individuals or organisations with weaker cases. Knowing that they may be liable for the opposing party’s legal costs if they lose can discourage them from pursuing litigation. This can greatly help in filtering out frivolous or unmeritorious claims, which is a positive aspect of cost orders.
Another positive aspect of stronger cost orders is that it encourages settlement. The possibility of cost orders can encourage parties to settle their disputes out of court. Settling may be a more cost-effective option than proceeding with litigation. We can view this as a positive outcome, as it can help reduce the burden on the court system.
Moreover, cost orders play a role in the risk assessment of litigation. Parties may weigh the potential costs of losing against the benefits of winning when deciding whether to litigate. This can lead to strategic decisions about whether to pursue a case or seek a settlement. The complexity of cost orders and the uncertainty surrounding their outcome can make parties feel unsure about the potential costs they might be ordered to pay, making it difficult to budget for litigation expenses.
Family Violence and Cost Orders
In AVO cases, the court may order one party to pay costs for the other party. In case the court makes Final Apprehended Violence Orders, the court can ask the defendant to pay costs for the applicant (the person in need of protection).
If defendant is made to pay the costs for the applicant, the financial compensation may greatly help victims of family and domestic violence. It can help them restructure their lives after facing abuse and trauma.
On the other hand, courts can also dismiss an application if it finds that the application is “frivolous” or “vexatious.” This includes applications that parties make to deliberately cause trouble. In such circumstances, the court can make an order for costs against the applicant.
In such instances, if there are stronger cost orders, individuals will be discouraged from making false or frivolous claims of family violence.
But it can also make genuine victims of domestic violence feel hesitant about pursuing legal action. They may worry about the financial burden associated with litigation.
This makes the question of stronger cost orders in Australian family law, particularly within the context of family violence matters, an important matter of policy consideration.
It is necessary to strike the right balance between protecting victims and preventing abuse of the legal process. While cost orders can be a useful tool to stifle litigation in cases where there is a significant power imbalance between parties, it must not be seen as a barrier to access to justice, particularly for individuals who may be hesitant to pursue legitimate claims due to the fear of incurring substantial legal costs if they lose.
